MA Plans pay for health Care Services
In 2022, Medicare Advantage plans paid an estimated average of $2,350 per person over the estimated cost of providing Medicare-covered services. This amount is known as a rebate.
The federal government have helped increase Medicare enrollment and overall program expenditures. CBO predicts that between 2021 and 2032, net Medicare expenses (i.e. the ones after subtracting offsets and premiums) will increase in proportion to the federal budget and nation’s GDP.
The average MA plan rebate has grown significantly in recent years. This trend is due in large part to the fact most MA plans are located in areas that have high benchmarks. For every dollar that differs between benchmarks, MA plan costs (including profits) and rebates are 32 cents and 52 cents more, respectively.
Costs for MA plans vary based on the region because the Medicare Advantage program uses different benchmarks and reimbursement strategies for each of the service areas. It is not unusual to see the same MA plan to be a part of multiple regions, and with different benchmarks and payment strategies.
The MA program also provides additional benefits not covered by Original Medicare, such as hearing, vision and dental services. These costs may vary based on plan, as well as monthly plan premiums and out-of-pocket maximums. They can be affected by network restrictions. In VBID, MA plans are creating new solutions to meet the needs of individuals by addressing social determinants of health and enhancing coordination of care.
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